Staples Case Study
Staples was the first office supply store, at a time where many companies began consolidating and making retail stores that focused on one industry. Staples wanted to focus on being low cost and wanted to target small businesses as small businesses did not get similar discounts as many big corporations. The CEO of Staples, Tom Steinberg, was able to attract many invetors though his visionary pitch. Although other stores that supplied office supplies opened up, Staples was the leader because it was able to maintain low costs and fulfill its customers needs.
When analyzing the first of Porter's Five Forces Model, risk of entry by potential competors is weak. Although its not hard to enter into the office supply business, its hard to stay in business because the three largest office supply store take most of the market share. Intensity of rivalry is intense, and Staple's main competitors are Office Depot and Office Max. The bargaining power of buyers is weak. Consumers are the largest buyers of Staples, however, they are weak because Staples makes sure that they focus on their needs through different methods such as discounts, coupons, and membership cards. The bargaining power of suppliers is also weak. Staples was very effectively able to negioate with its suppliers to have the most effective supply chain. Threat of substitutes is a strong force. Many retailers sell office suppliers. However, these companies do not offer a a great variety of products like Staples does.
When doing a SWOT analysis, Staples strenghts lies in its low prices and its brand. name. In addition, Staples train their employees on office supplies. Some weaknesses also exist. There is no product differentiation in the office supply industry, and many other retail stores also sells office supplies. In addition, Staples strives to rent space in urban areas which can be costly. Opportunities lie in the global market. Many jobs are being outsourced to the asian markets,...
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